You can’t have talent management without competencies, which have long driven critical processes like selection, development, and performance management. Whether by stating the competency requirements of a new or vacant position, articulating and communicating an organization’s most valued capabilities to guide advancement, or building competency-based learning curricula, talent-focused organizations have heavily concentrated their efforts on helping employees understand and craft the competencies necessary for success.

In the June 2004 issue of Harvard Business Review, Norm Smallwood and Dave Ulrich described organizational competencies as “key intangible assets,” and urged leaders to evaluate and build the ones needed to create intangible value. Their logic: When you build competencies as your objective, you make deliberate investments in people development.

Once an organization determines what its key competencies are—collaboration, innovation, and efficiency, for example—it can create selection tools to screen for these capabilities among existing employees or employment candidates. Em­ployees, in turn, benefit from knowing which competencies are most valued by the organization or most critical for success in a given role. This facilitates focus and intentionality among those who are developing capabilities, and those whose job it is to enable this development.

From here, many employers define career paths and structured learning experiences designed to help employees develop valued competencies and advance professionally as they do so. It’s a virtuous cycle, reinforcing the importance of building the competencies that are most valuable.

It’s hard to argue that people who learn how to collaborate, communicate, and hold others accountable aren’t building competencies that are valuable to them individually as well as to their current and future employers. But the challenge a capability focus presents is illustrated by the following example.

Let’s say a soccer coach is assigned a new team of players. These are high-school athletes who have played together for several years, but are coming off multiple losing seasons. While the players have varying levels of ability, they mostly have the same level of experience and enjoy being on the same team.

The coach’s initial assessment: Many of the players lack some of the foundational competencies for success as individuals and, very importantly, as a team. While some of the players have significant speed and shoot the ball well, their passing accuracy is generally poor. Even when the forwards are open, they often don’t have a ball at their feet. So the coach implements a focus on fundamentals such as ball control, foot skills, passing, and on-field communication.

The team improves … to a point. The players enjoy playing better soccer and winning more games, but they aren’t capitalizing on their potential. While they’ve become more capable—some can juggle infinitely, others have learned the value of the back pass—the defense and midfielders still can’t get the ball to the forwards at the right time, and only two of the players are reliable goal scorers, keeping the team from becoming a powerhouse.

The benefits of the coach’s competency development focus were significant: While some players didn’t enjoy the drills and practice required to build competencies, they followed through and the results were noticeable. The players built core skills, played better soccer, had more fun, and won more games (perhaps not in that order). But they didn’t win as much as they could have; they never rose to the level of their potential. Why? Because they didn’t consistently outscore their opponents. And teams that don’t outscore their opponents don’t win games.

Maybe this is a simplistic example, but it gets to the core of what can be missing when organizations and their employees focus on building competencies without also generating the necessary results from those capabilities. We refer to these results—the outcomes of applying competencies—as “contribution.”

Defining the capabilities that distinguish your organization from its peers isn’t only a key source of competitive advantage—it’s the basis for effectively executing business strategy. That said, building competency isn’t the same as applying it. And it’s the application that creates results.

Are competency and competency development still important? Of course! In fact, we’ve found them essential. For example, some industries are full of firms that claim to be “the low-cost provider.” The capabilities necessary for executing on this objective can range from purchasing, to outsourcing partnerships, to inventory management. Each of these competencies can drive cost down, but excellence in one doesn’t necessarily result in excellence in another.

By extension, individual success in Company A that excels in inventory management might not translate to Company B, where the low cost of raw materials generated through an expert purchasing function distinguishes the company in the marketplace. So while both companies may pursue the same objective, the core competencies of each organization are what distinguish them to customers, employees, and business partners. In short, they are drivers of competitive advantage.

The Case for Contribution

In their HBR piece, Smallwood and Ulrich noted that “organizational capabilities enable a company to turn its technical know-how into results,” and said “leaders need to do more than talk about capability; they need to demonstrate it.” The potential to achieve an outcome is important, but in the end, it’s executing to achieve the key outcome that creates competitive advantage.

Enter contribution, or the outcome that results from applying competencies. Contribution is closely related to—but not a substitute for—competency. It’s what people and organizations actually “do” with these capabilities. Clarity regarding expected contributions (both types and amount) helps employees and their employers become more aligned, efficient, and effective. The difference can be illustrated in Figure 1.

Building on competency to enable contribution focuses performance and makes development more tangible. In Figure 1, the organization’s talent capability drives competitive advantage. To support this capability, leaders are asked to focus their contributions on the teams and individuals for whom they’re responsible.While the competency and the contribution are closely related, the contribution statements more specifically describe what individual leaders must do to create competitive advantage through talent. In this organization, leaders must contribute to employee retention and motivation by building teams and being inclusive, collaborative, and inspirational.

Driving Results Through Contribution Planning

Because contributions are tangible and observable, they can enable powerful goal setting through a process we call contribution planning. This shifts effort and focus from writing down and agreeing to a list of things that should (or might) align with organization priorities to a deliberate planning process that targets a limited number of focused areas where an employee will apply their capabilities to achieve an important result.

Organizations shouldn’t require employees to set objectives for every contribution area. This isn’t just dilutive, but overwhelming to individuals and the organization, too. Imagine an organization where everyone has the objective of making the same 10 contributions. Not only can the overlaps be substantial, but they may also keep important priorities from garnering sufficient mindshare.

Because they’re discrete and specific, contributions make it possible to coordinate and maximize the efforts of a group of people by minimizing unnecessary overlap and ensuring that important efforts don’t fall through the cracks.

While one leader might focus their contribution on talent as described in Figure 1, another could prioritize contributions to their organization’s reputation and brand, promoting the organization and its capabilities through highly visible speaking and writing, taking on a leadership role in industry associations, and becoming known as an expert on an important and relevant topic.

A simple approach to contribution planning is illustrated in Figure 2. Relying on three sources of input, an employee then creates a simple contribution plan to guide his or her efforts. Aligning what the organization needs, with focused contribution that takes into account performance feedback, results in a brief and tangible plan that employees at all levels can actually “do.”

The added benefit? Since contribution plans are built to accomplish both organizational and individual priorities, they provide the opportunity to coordinate and optimize the contributions of groups of people by establishing complementary objectives.

To apply these in setting goals and assessing performance, leaders can be asked to further specify how their intended contributions best fit their assignment and talents.

For example, the nature of contribution might vary by the number or type of people in the leader’s group and the nature of the leader’s role (direct or indirect leadership), or whether specific opportunities can help strengthen the organization’s brand by obtaining a patent, giving a TED Talk, or writing a book.

Go from “Can Do” to “Did Do”

By implementing contribution planning, organizations and their employees take an important step toward getting the most from their collective efforts. Of course, high performance isn’t a “set it and forget it” endeavor. Regular monitoring and feedback are crucial to staying on track.

Some organizations might specify the metrics by which contributions will be assessed; others may require specific goals. Here’s an example of what the specific goals for the talent contribution area in Figure 1 could include:

A 5 percent improvement in staff engagement within area of responsibility (as measured through annual engagement survey).

Targeted level of (and decrease in) voluntary turnover.

High-potential employee promotion and retention rates.

Verified assessment of overall climate within area of responsibility, reflecting alignment with strategy, confidence in opportunity, and shared accountability for performance.

These are concrete objectives that can be measured and supported with concrete evidence. While some of the contributions require a survey or other time-based instrument to measure progress during the performance period, this shouldn’t be a barrier to their application throughout the period. Conversations about how to improve engagement and retention help clear the decks of potentially extraneous initiatives that aren’t aligned with the contribution plan.

Assessing results should also be straightforward. See Figure 3 for what employees should assess and managers should review.

Implementing a contribution-centric approach to talent provides a clear path for capturing the competitive advantage of organization and individual capability. By activating competencies through clear contribution models and a simple contribution planning process, organizations can help their employees get the most from their efforts.

In our experience, the tangible nature of contributions causes employees to take capability development more seriously. Committing to specific contributions clarifies the standard and “starts the clock” on generating results. This makes competency development more urgent and deliberate, directing attention toward the competencies most necessary for performance.

With contribution driving both business operations and talent management, feedback and course correction are natural since they’re part of core planning and execution processes. Assessment and advancement processes become less subjective as everyone involved is focused on results and outcomes (not inputs). And don’t forget: Contribution doesn’t replace competency. It’s a natural extension, because it transforms potential into results.
Use this powerful opportunity and you’ll position yourself to generate a real competitive advantage by creating tangible value from intangible assets. Ready to seize it?